Cheaper Feed Prices Boosting Finished Cattle WeightsThu, 16 Oct 2014 12:16:36 CDT
One of the realities of the US cattle industry is having some of the smallest numbers the nation has seen in decades. As producers begin to retain heifers and grow their cowherd, that means even tighter cattle supplies in the days to come. Livestock Marketing Information Center Director Jim Robb said while there are fewer numbers, many of the cattle in feedlots are being fed to heavier weights.
"Steer dressed weights have gone up dramatically, we've had strong year over year increases," Robb said. "The normal pattern is for year over year increases but we haven't had those really the last five or six weeks. We have had slaughter number running this past week nearly eight percent below a year ago for all cattle. Steer and heifer slaughter running four to five percent below a year ago. We probably haven't done a very good job marketing cattle but its worked out well to the advantage of feedlots."
Radio Oklahoma Network Farm News Director Ron Hays featured Robb on Thursday's Beef Buzz. You can listen to the feature by Clicking on the LISTEN BAR below.
While there are very tight supplies of cattle as indicated by the slaughter level reports, Robb said its unusual in this type market environment there are record high steer weights averaging 893 pounds in the prior week. That was up six pounds week over week and 26 pounds above a year ago, but in the current market it doesn't make as much difference. He said it doesn't seem to be a major problem for the industry as packers are still stepping forward and buying these cattle.
Feedlot operators are able to add those extra pounds at a minimal cost with less expensive grain prices, but on the other hand packers are being challenged with heavier carcasses as they try to manage the size of the cuts to go into their boxes. Robb said the markets have been very volatile in recent weeks, so maintaining these levels could be challenging.
"If we don't have further six pound week to week increases in these dressed weights and we go sideways as we normally do from this point in the year and then a little drop off as we get into December, I think we will be ok," Robb said. "But if we see these weights continue to pick up five, six, seven pounds week over week it will be clearly indicative of more little bit more problems and it will be very difficult to hold the 160's. It might slip the market back into the upper 150's. We're not forecasting that at this point and time, but it certainty is something to watch given that we have ratcheted up to these high levels in terms of dressed weights."
The big unknown is at what point will packers push back and start discounting these heavier cattle when they buy them.
The Beef Buzz is a regular feature heard on radio stations around the region on the Radio Oklahoma Network- but is also a regular audio feature found on this website as well. Click on the LISTEN BAR below for today's show- and check out our archives for older Beef Buzz shows covering the gamut of the beef cattle industry today.
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